U.S. House Puts Off CAFE Boost

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The Democratic leadership in the U.S. House of Representatives has decided to put off a debate on changes to the Corporate Average Fuel Economy (CAFE) standards.

Nancy Pelosi, the Democratic Speaker of House, said CAFE changes will be voted on next fall.

The delay is something of a victory for automakers, who are lobbying hard to dilute the tough rules adopted by the Senate in June. Automakers and the United Auto Workers have lined up behind a weaker set of mileage standards proposed by Rep. Baron Hill, an Indiana Democrat, who has challenged the more stringent rules proposed by Massachusetts Democrat Ed Markey. The competing bills have created a split in the Democratic caucus and persuaded Pelosi to put off the final vote.

The fight over CAFE, while painful for Democrats, has also become a major embarrassment for Detroit's Big Three, who on one hand are trying to keep the tougher standards at bay at the same time they are trying to boost their image in front of fashion-conscious American consumers.

Big Three sales dropped below 50 percent for the first time ever in July.

One General Motors official with a clear view of the unfolding debate, who asked not to be identified, acknowledged the CAFE debate is undermining the company's efforts to talk about the positive side of its fuel efficiency and environmental record.

"Obviously, it hurts. We just wish the whole thing would go away," he said.

Environmental groups, meanwhile, continue to press hard for tougher standards, saying they are vital to fight global climate change and national energy security.

Pelosi also has reiterated her support for higher standards.

"The American people, in every region of the country, overwhelmingly support stronger fuel-efficiency standards, and we will have an opportunity to address this issue shortly," Pelosi said in a written statement. "The Senate energy bill does contain a CAFE provision, which I support."

Markey's bill would require automakers to meet an average of 35 mpg one year earlier than the provision included in the Senate bill passed in June. The Hill-Terry plan includes a 35-mpg requirement by 2022.

Officials from more than a dozen states also weighed in last week, warning that the Hill-Terry bill might undercut their own limits on greenhouse-gas emissions from autos. The states, led byCalifornia and New York, have sought permission from the Environmental Protection Agency (EPA) to set their own carbon-emissions rules on cars.

The automakers, and Dingell, are completely opposed to the idea.

"While fuel-economy standards are an important part of the solution, we must also be mindful of the role automakers play in the American economy," Rep. Brad Ellsworth, D-Ind., a leader of moderate and conservative Democrats, who is supporting the Hill-Terry proposal.

Meanwhile, Pelosi did have more than enough votes to drive a new energy package through the House, which included more than $16 billion in new taxes on oil companies and a broad array of tax breaks and incentives for renewable energy and conservation efforts.

"We are turning to the future," Pelosi said. "It's about our children, about our future, the world in which they live.”

The House energy bill, in what could well be a precursor of the final vote on CAFE, will also require investor-owned electric utilities nationwide to generate at least 15 percent of their electricity from renewable energy sources such as wind or biofuel. The utility companies had lobbied hard against the provision but environmentalists said it was needed to spur investments in renewable fuels and help address global warming. The environmentalists use similar arguments to push for tougher CAFE standards.

The bill also calls for more stringent energy efficiency standards for appliances and lighting, and incentives for building more energy-efficient "green" buildings.